NetApp CFO: The Finance Chief’s Role Is Growing

In so many industries, chief financial officers have to think more about technology, data and security. Nick Noviello is the chief financial officer of NetApp Inc., a provider of storage and data management solutions based in Sunnyvale, Calif. He spoke with CFO Journal Editor Noelle Knox about the decisions many CFOs are facing.

Q: How is the role of the CFO changing?

NetApp Inc.

NetApp CFO Nick Noviello

The CFO’s job is getting broader all the time — strategic, operational and financial. Yes the CFO is thinking about investors and company valuation, but the CFO also has to chart the course for the critical operational scaling of the firm. As business gets more regulated and more global, this role is getting very, very broad.

One thing this means is that CFOs are playing a big operating role with the technology – both physical and virtual infrastructure – that is used to run the firm. It’s important not only to think about that architecture today, but also tomorrow and be able to put IT in the context of business strategy — meaning where do we want to go and, operationally, how do we get there? That bridge needs to be as scalable and as efficient as possible.

Q: What does a CFO have to think about when considering moving data to the cloud?

The cloud can certainly mean IT scale for the future, but it has to be done right and can be very complex. With the cloud, I can experiment with what the future will look like. I can experiment without building a massive infrastructure. I can fail fast and move onto the next thing, to get to the results I want.

NetApps’ perspective is that this world is going to move toward a hybrid cloud where I own part of the IT in my four walls and part of IT I rent from other people in a public cloud. Done right, this can enable great business flexibility. But if I have infrastructure and data within my four walls, and additional data sitting in someone else’s world, or more likely multiple other worlds, I’ve got to somehow manage all of this data across these different environments.

The management and governance of my data is critical. For example, in my four walls I may want to have my most important intellectual property and I may want my old records to be in a secure public cloud environment. But cold data doesn’t always stay cold and hot data doesn’t always stay hot. I need to be able to move it from one place to another with efficiency of speed, and cost, and with the appropriate controls.

Q: How big is your finance department?

I’ve got about 1,000 people reporting to me, both traditional finance and IT.

Q: What’s the advantage of having the CIO report to the CFO?

There’s a great advantage here, strategic, operational and financial… being able to think about and have the IT-side front and center in the conversation is critical as we work through scaling the business. Understanding the financial ramifications, working through alternatives as one team, and building an IT infrastructure together is a big benefit of having the CIO as part of the Finance organization.

Q: What is the down-side risk of moving data to the cloud?

It’s about how you manage it. The [development of the] cloud is a journey and it is evolving with our customers. Nobody yet has a full runway built. My business and my IT infrastructure need flexibility. Cloud is not necessarily the answer in every single instance. I need to balance cost, control, and flexibility. Cloud is great for enabling new business opportunities by giving me the ability to spin up compute quickly and without any lingering effects once I no longer need it. Storage is different – I rarely get rid of data once it’s created; it grows and needs to be stored, which can be an expensive proposition. Also, data has weight – it’s not easy to move around. I need to be concerned about getting my data in and out of the cloud, as well as between clouds, so I can avoid vendor lock-in.

Q: How is regulation affecting the cloud?

We all hear about data privacy as an example. How does data privacy evolve? Over time, we’ve become the platform on which many regional telecommunications companies have built their cloud services in Europe. One of the reasons these regional telcos have become successful is because their customers know their data is staying within country boundaries. Data privacy regulations, as they move from Europe to the U.S., will put more cost pressure on IT. Companies will grapple not only with enormous data growth, but also with more rules on where their data is, how it can be accessed and how it can be controlled.

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